"Six Habits" Recommended to Improve Public School District Finances

For Immediate Release

MIDLAND—Michigan’s 554 public school districts should examine six habits of fiscal responsibility in order to shore up budgets or return scarce dollars to instructional activities, according to a new study published today by the Mackinac Center for Public Policy.

Those six habits will be discussed at a public forum on Wednesday, Dec. 11, 2002 at the Lansing Center Governor’s Room from 9 a.m. to 10:30 a.m.

The study, entitled "The Six Habits of Fiscally Responsible Public School Districts," is a fiscal guidebook for public school superintendents, business managers, and school boards. The authors, Mackinac Center Director of Education Policy Kirk A. Johnson, Ph.D. and Education Research Associate Elizabeth H. Moser, argue that public school districts should look for cost savings in the non-instructional areas of school finance before laying off teachers or other essential staff.

The authors recommend that school districts:

Habit 1: Minimize Administrative Costs. Front-office administration should be only as large as necessary to efficiently operate schools and programs.

Habit 2: Take Advantage of Cost Savings from Outsourcing Non-Instructional Services. When non-instructional services, such as janitorial, food and transportation are opened up for competitive bidding and private outsourcing, school districts can improve services, reduce costs or both.

Habit 3: Manage Employee Health Benefits Effectively. Reforming the way district health benefits are provided can save districts large sums of money.

Habit 4: Structure Capital Costs Effectively. Districts should utilize effective debt policies and consider leasing classroom space to manage future enrollment changes.

Habit 5: Participate in Michigan’s Schools-of-Choice Program. Participation in the schools-of-choice program provides incentives for schools to accelerate innovation and adopt positive reforms.

Habit 6: Reform Collective Bargaining. School employee unions can limit the ability of school districts to enact needed reforms. Collective bargaining should be reformed so that school boards and administrators do not cede managerial authority to the unions.

"Too many public school districts threaten to cut instructional programs or lay-off teachers when there is a budget crunch. Instead, districts should look to cut wasteful spending first," said Johnson and Moser. "More than 40 percent of the nation’s school districts have contracted out bus transportation and more than 21 percent have outsourced food services. In the process, districts often find their costs decrease and quality increases," they wrote.

The Mackinac Center for Public Policy is a nonprofit, nonpartisan research and educational institute based in Midland.

To download a copy of the study, click on www.mackinac.org/s2002-06. To RSVP for the Dec. 11, 2002 "Six Habits of Fiscally Responsible Public School Districts" forum at 9 a.m. at the Lansing Center, e-mail Elizabeth Moser at author@mackinac.org or call 989-631-0900.